fbpx

South African Agriculture, with Certain Exceptions, Faces Slow Growth in Coming Years

South African Agriculture, with Certain Exceptions, Faces Slow Growth in Coming Years

15 August 2019 – The Bureau for Food and Agricultural Policy (BFAP), a nonprofit organisation, has warned that it expects the gross value of South Africa’s agricultural production this year to be similar, in real terms, to that of 2015. It stated this in its ‘BFAP Baseline Agricultural Outlook 2019-2028’ report, which it released on Wednesday.

“Apart from low commodity prices and and pressure on disposable income of consumers, sectoral performance was riddled with exogenous shocks, such as Avian influenza, Listeria and severe drought conditions in many parts of the country,” stated the report. “Under the 2019 Baseline projections, the short term recovery in agricultural GDP [gross domestic product] is supported by higher international prices following excessively wet conditions in the United States. After that, sustained improvements only occur from 2023 onwards, when economic growth rates pick up and production levels in the livestock industry recover from the drought and disease outbreaks.”

Moreover, the global agricultural trade environment is now more hostile than it was a decade ago. Today, there is the China-US trade war, which is affecting global trade flows; Europe is tightening up its environmental and sanitary and phyto-sanitary regulations; the African Swine Flu outbreak in China could result in a global livestock market shock; while intra-African trade remains hobbled by protectionism, bureaucracy, high costs and ad hoc policies. This situation requires nimble government responses, closely working with the private sector, to achieve success in the global markets.

“Despite the difficult conditions in South African agriculture in recent years, some sectors performed exceptionally well, with both reinvestment and greenfields investment maintaining and growing output and employment,” pointed out the report. “As a share of global trade, South African exports of citrus, grapes and pome fruit [for example] have been increasing over the past decade, with citrus leading the way, growing its [global market] share from around 4% in 2001 to more than 10% in 2018, followed by table grapes (5% to 7%) and pome fruits (3% to 6%).”

At home, the cost of a basket of staple foods for a family of four has decreased, from R479 a month in 2016 to R425 a month in 2018. But BFAP expects this trajectory to reverse and for the cost of the staple basket to increase by 6% between this year and 2028. The main driver of this rise will be the price of maize meal, which is forecast to rise by 11%.

DDD”While Baseline [report] projections are generally positive in the sense that a recovery is projected under the current set of assumptions, South Africa needs more to achieve the targets of transformation, jobs, growth and land reform that have been set by the National Development Plan,” warns BFAP. “The sector will only grow above baseline expectations through implementation of very specific and well-coordinated actions and plans, of the public and private sector, with real capital and people to drive inclusive agricultural transformation and transfer of land in a just and sustainable way. There is no lack of plans and we have the benefit of learning from our mistakes — what is needed now is a greater emphasis on implementation.” Source (Engineeringnews) https://bit.ly/2H83k8x